US GDP came out stronger than expected at 4.3% (3.2%), while US Consumer Confidence declined to 89.1 (91.7). The Dollar Index has slipped below 98 and could test 97.50–97.00 before stabilising. EURUSD needs a confirmed break above 1.18 to extend the rise towards 1.19–1.20. EURINR may trade in the 104–106/107 range for some time. EURJPY and USDJPY can test 184–183 and 154 respectively before attempting a bounce later. USDCNY is coming off as anticipated and can test 7.025 or even 7.00 while below 7.045. AUDUSD is heading towards resistance near 0.68. The Pound needs a sustained move above 1.355 to extend gains towards 1.36 and higher. Meanwhile, RBI announced ₹2 lakh crore of liquidity infusion through OMO purchases of government securities and a $ 10 bn USD/INR Buy–Sell swap (3-year tenor) to inject durable liquidity into the banking system. USDINR is trading below 89.50 in the NDF market. If the spot opens lower in the onshore market, an initial test of 89.00 can be seen before the pair attempts to bounce back later.

Dollar Index (97.76) has slipped below 98, and if the decline extends, an initial test of 97.50–97.00 is likely before a rebound attempt. An immediate bounce from current levels would be needed to negate this downside risk.

EURUSD (1.1801) need to see a decisive break past 1.18 to bring 1.19-1.20 into picture. Else, the range of 1.18-11.7 can continue to hold.

EURINR (105.6518) need to sustain above 105.50 to head toward 106-107 levels. Overall, a range of 104-106/107 can hold for some time.

EURJPY (183.64) is coming off in line with our view and can test 183-182 before rebounding later.

Dollar-Yen (155.65) has moved below 156 and failing to see an immediate bounce can extend te fall towards the lower end ots broad 158-154 range.

USDCNY (7.0264) is declining gradually and our target of 7.025-7.00 can get tested in the near term.

Aussie (0.6708) has risen past the interim resistance at 0.67 but is now facing a higher resistance near 0.68, which is expected to hold and push the pair back toward 0.66 or lower in the medium term.

Pound (1.3528) has risen well in line with our view, and a sustained move above 1.3550 will be required to extend the rally toward 1.36 and higher.

USDINR (89.4840) is trading below the support at 89.50 in the NDF market. If the spot opens lower in the onshore market, an initial test of 89.00 can happen before attempting to bounce back later.

The US Treasury yields have come down sharply after testing their resistance. That keeps the sideways range intact. We will have to wait for the range breakout to get clarity on the next move. The German Yields have also come down sharply. But supports are there to limit the downside and keep the uptrend intact. The 10Yr GoI has come off sharply from the day’s high. View remains bullish. There is still room left on the upside for the yield to rise before witnessing a reversal.

The US 10Yr (4.16%) and 30Yr (4.82%) Treasury yields have come-off sharply from 4.2% and 4.86% respectively. So, that keeps the 4.1%-4.2% (10Yr) and 4.8%-4.9% (30Yr) range intact.

The German 10Yr (2.86%) and 30Yr (3.49%) yields have come down sharply. A near-term dip to 2.8% (10Yr) and 3.4% (30Yr) is likely before rising back to 2.95%-3% (10Yr) and 3.55%-3.6% (30Yr).

The 10Yr GoI (6.6328%) spiked to a high of 6.6995% and has come down from there. While above 6.6%, the upside will remain open to see 6.75% before a reversal is seen.

Dow and DAX continue to rise as expected and could target 49000 and 24400 respectively. A break past 24400 in DAX can lead to further upmove towards 24500/600 else a rejection from 24400 can take it back towards 24000. Nifty can slowly reach towards 26400-26600 on a break past 24200. Nikkei and Shanghai can rise towards 51000-52000 and 4000-4100 respectively.

The Dow (48442.41, +0.16%) is rising as expected. The upside target of 49000 remains intact while above 48000.

DAX (24340.06, +0.23%) seems to enter into a sideways consolidation while below 24400. Failure to break past 24400 can pull down the index towards 24200-24000 again in the coming days.

Nifty (26177.15, +0.018%) tested 26233 but dipped to close lower. A sustained move above 26,200 is needed to push the index higher towards 26,500/600. Else a decline back towards immediate support at 26,000 can be possible.

Nikkei (50586.12, +0.34%) has broken above 50500 mentioned yesterday. Continued upmove from here can take it towards 51000-52000 soon. Watch price action near 50550/600 region for any rejection.

Shanghai (3,918.96,  -0.026%) trades slightly lower today. While above 3900, we keep intact our upside target of 4000-4100.

Crude prices remains strong. Brent is supported by geopolitical risks and aiming for $ 63–$ 64, while WTI has broken above $ 58 and can test $ 60. Gold is extending its uptrend towards $ 4600–$ 4650. Silver remains strong with upside towards $ 73–$ 74. Copper is holding near the upper end of the $ 5.3–$ 5.6 range and may stay range-bound. Natural gas has dipped after a sharp weather-led rally, but above $ 3.80 a bounce towards $ 4.20–$ 4.40 is still possible.

Brent ($ 62.38) is continuing to rise, contrary to our expectation, amid concerns over oil supply risks linked to Venezuela and the Ukraine–Russia conflict. A further rise towards $ 63–$ 64 can be seen in the near term.

WTI ($ 58.37) has broken above $ 58, going against our expectation. It can now rise further to test $ 60 in the near term before any reversal is seen.

Gold ($ 4538.40) is moving up steadily in line with our expectation and can extend the rally towards $ 4600–$ 4650 in the coming sessions.

Silver ($ 72.37) has moved above our expectation and can continue to rise further towards $ 73–$ 74 in the near term.

Copper ($ 5.57) has moved up to the upper end of the $ 5.3–$ 5.6 range. It can continue to trade within this band for some time until a breakout occurs on either side.

Natural Gas ($ 3.91) surged to a high of $ 4.4490 yesterday on colder forecasts for the US East Coast. Xweather has forecast that a storm system will bring colder temperatures across the Midwest and Eastern Seaboard by the end of December. Today, prices opened with a gap down near $ 3.89. While above $ 3.80, the chances of a bounce back towards $ 4.20–$ 4.40 remain alive.

GMT 23:30 IST 05:00 JP Unemp
…Expectations 2.6 …Previous 2.6 –

DATA YESTERDAY
===============

GMT 13:30 IST 19:00 US GDP
…Expectations 3.2 …Previous 3.8 …Actual 4.3

GMT 13:30 IST 19:00 US Durable Goods Orders
…Expectations 0.2 …Previous 0.5 …Actual -2.2

GMT 14:15 IST 19:45 US Industrial Production
…Previous 0.1 …Actual 0.2

GMT 14:15 IST 19:45 US Capacity Utilization
…Expectations 75.9 …Previous 75.9 …Actual 76.0

{GMT 15:00 IST 20:30 US Cons Conf
…Expectations 91.7 …Previous 92.9 …Actual 89.1